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VantagePoint's Salzman: Lighting Will Be the "Instant Gratification" Green Market

Lighting will be the greentech market that will provide “instant gratification” for greentech investors and entrepreneurs, according to Alan Salzman, co-founder of venture capital firm VantagePoint Venture Partners. The $100 billion to $150 billion spent every year on lighting will naturally begin to shift to light emitting diodes (LEDs) shortly because it makes economic sense, said Salzman on a panel at Fortune’s Brainstorm Green Conference on Monday.

Salzman’s market assessment assumes an LED bulb of $25 or under, he said, which to us still seems to be a couple years away. Last week General Electric (s GE) said it would start selling an LED bulb that can fit into a standard incandescent socket that would cost $40 to $50. Panasonic will be selling a 60-watt LED bulb that costs $44 to $55. So the price of LED bulbs still need to drop in half to hit Salzman’s instant gratification point.

But, as Salzman suggests, that price could possibly get there quite rapidly. As Greentech Media reported in October the cost of Panasonic’s LED bulb actually did drop by half from the year earlier. The report points out that governments banning incandescents and startups offering competition have given the market a real boost as of late.

While Salzman said LED bulbs are price competitive with less efficient lighting “without government subsidies,” I think progressive policies have been a major driver. The U.S. will be phasing out incandescents starting in 2012. Of course Salzman has some skin in the game — VantagePoint Partners has invested in LED company BridgeLux.